EU imposes sanctions on Iranian oil

Washington Post

Updated 11:26 pm, Monday, January 23, 2012

BRUSSELS — Europe banned the import of Iranian oil Monday and froze Europe-based assets of the Central Bank of Iran.

The ban, decided by foreign ministers of the 27-nation European Union, intensified an international campaign to choke Iran's economy and force the radical Islamic government to dispel fears that it is working to develop nuclear weapons.

The British foreign secretary, William Hague, called the E.U. effort “unprecedented” and said it shows the resolve of European governments to prevent Iran from becoming a nuclear power.

But the decision also includes broad loopholes — including a six-month delay before it goes into effect — that soften its immediate practical impact.

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Existing contracts for Iranian oil can be respected until July 1, an announcement said, and the ban will come under review before May 1 to see if more flexibility is needed.

Countries such as Greece and Italy, suffering under crippling debt burdens, are likely to get more time before they have to break their financial ties to Iran, European diplomats said.

Greece has been buying oil from Iran on credit and earns desperately needed money by refining crude for Balkan neighbors, they said.

Italy has arranged for Iranian oil in payment for loans granted by Rome in the past.

Iran has the benefit of its contracts with Asian nations — in particular, about 60 percent of Iran's 2.2 million barrels a day of exports have been locked into contracts with China, Japan and South Korea. Turkey accounts for an additional 7 percent.

“If any disruption occurs regarding sale of Iranian oil, the Strait of Hormuz will definitely be closed,” said Mohammed Kossari, deputy chief of the parliament's foreign affairs and national security committee.

The Strait of Hormuz is a narrow exit from the Persian Gulf through which one-fifth of the world's oil exports pass.

Ali Fallahian, a member of the country's influential Assembly of Experts and a former intelligence minister, said Iran should cut off sales to European nations immediately and, if the crisis grows, constrain maritime traffic through the strait.